Debenhams posts fall in profits
Debenhams blamed "very difficult conditions" today as annual profits slipped after a mixed year for the department store chain due to volatile weather.
The firm posted a 2.7% drop in pre-tax profits to £154 million for the year to August 31 following a tough first half after January's snowstorms saw it warn over profits, while dismal spring weather dampened demand for new season ranges.
But Debenhams, which has 238 stores in 29 countries, including 156 in the UK, said it was pleased with its performance after an impressive online sales hike helped offset some of the earlier trading woes.
Like-for-like sales rose 2% overall in the year to August 31, with online revenues a star performer for the group, rising by 46.2% to £366.3 million and offsetting a 2.7% drop in c omparable store sales.
Online sales accounted for 13.2% of total annual turnover, up from 9.3% the previous year, with a quarter coming via smartphones and tablet computers.
Debenhams last year set itself a target to boost online sales to £600 million within three to five years.
Chief executive Michael Sharp followed other high street retailers in cautioning over subdued consumer spending in the year ahead.
He said: "The past year has not been without its challenges and I believe despite the improved news about the economy, the UK consumer remains under pressure."
Argos and Homebase parent Home Retail Group yesterday said it believed the wider economic recovery had yet to help under-pressure family incomes.
The drop in Debenhams's profits follows a resurgent previous year, when profits rose 4.2% after a sales revival.
But Debenhams said it had increased its market share, helped by store revamps and the addition of a raft of new designers, including Hammond & Co by Patrick Grant - its first new designer menswear brand for 10 years.
Mr Sharp brushed aside the threat of competition from rival Marks & Spencer's recent womenswear fightback led by a star-studded autumn/winter clothing launch, saying market share gains "demonstrate we are clearly getting lots of things right for our customer".
The group also confirmed it is on track to open the doors to is revamped flagship store on London's Oxford Street in December, to coincide with the firm's 200th anniversary celebrations.